Correlation Between Wealthbuilder Moderate and Small-cap Profund

Can any of the company-specific risk be diversified away by investing in both Wealthbuilder Moderate and Small-cap Profund at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Wealthbuilder Moderate and Small-cap Profund into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Wealthbuilder Moderate Balanced and Small Cap Profund Small Cap, you can compare the effects of market volatilities on Wealthbuilder Moderate and Small-cap Profund and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Wealthbuilder Moderate with a short position of Small-cap Profund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wealthbuilder Moderate and Small-cap Profund.

Diversification Opportunities for Wealthbuilder Moderate and Small-cap Profund

0.92

Correlation Coefficient

Wealthbuilder Moderate  Small-cap Profund

Almost no diversification

The 3 months correlation between Wealthbuilder and Small-cap is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Wealthbuilder Moderate Balance and Small Cap Profund Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Small Cap Profund and Wealthbuilder Moderate is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Wealthbuilder Moderate Balanced are associated (or correlated) with Small-cap Profund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Small Cap Profund has no effect on the direction of Wealthbuilder Moderate i.e., Wealthbuilder Moderate and Small-cap Profund go up and down completely randomly.

Pair Corralation between Wealthbuilder Moderate and Small-cap Profund

Assuming the 90 days horizon Wealthbuilder Moderate is expected to generate 2.1 times less return on investment than Small-cap Profund. But when comparing it to its historical volatility, Wealthbuilder Moderate Balanced is 3.19 times less risky than Small-cap Profund. It trades about 0.24 of its potential returns per unit of risk. Small Cap Profund Small Cap is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  10,310  in Small Cap Profund Small Cap on May 21, 2025 and sell it today you would earn a total of  1,134  from holding Small Cap Profund Small Cap or generate 11.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	98.39%
Values	Daily Returns

Wealthbuilder Moderate Balance  vs.  Small Cap Profund Small Cap

Wealthbuilder Moderate

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Wealthbuilder Moderate Balanced are ranked lower than 19 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Wealthbuilder Moderate is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Small Cap Profund

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Small Cap Profund Small Cap are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Small-cap Profund may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Wealthbuilder Moderate and Small-cap Profund

The main advantage of trading using opposite Wealthbuilder Moderate and Small-cap Profund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wealthbuilder Moderate position performs unexpectedly, Small-cap Profund can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Small-cap Profund will offset losses from the drop in Small-cap Profund's long position.

The idea behind Wealthbuilder Moderate Balanced and Small Cap Profund Small Cap pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.